• The Wall Street Journal, Monday, January 21, 2008 11:30 AM

Floundering Internet giant Yahoo is ripe for a shakeup. "Yahoo is navigating the waters of Internet advertising like a goldfish evading a shark, in the form of Google," the Journal says, adding that its strategy of trying to become a start page isn't enough to challenge Google and the deep-pocketed Microsoft.

It's time now for activist investors to shake up the company. Yahoo would be a fine investment for the right group: Its stock underperformance is partly down to reversible factors like a discredited management team that's leading the company in the wrong direction. On the plus-side, Yahoo has cash on the balance sheet and a few key assets that are undervalued, particularly its investment in Yahoo Japan and Alibaba. Combined, these assets represent a big chunk of Yahoo's $28 billion market cap, and could provide an even bigger boost to shareholders if Yahoo created a separate investment company around them.

Meanwhile, Yahoo co-founder and CEO Jerry Yang has failed to turn around the Web giant's core businesses. Yang asked for 100 days, but nearly 200 days later, the company's stock is down 23 percent. Search is Yahoo's primary weakness. Despite a hefty investment in the Web's most lucrative market, Yahoo continues to lose market share to Google; it currently has a 17 percent share. The time has come for Yahoo to swallow its pride and outsource search to either Microsoft or Google.

Read the whole story at The Wall Street Journal »